Driving Business Innovation Through Technology Innovation. CIOs critical role as digital innovators By David Quinney

Transcription

1 Driving Business Innovation Through Technology Innovation CIOs critical role as digital innovators By David Quinney

2 2 Driving business growth through technology innovation Championing innovation In recent Accenture Strategy research, only 39 percent of business leaders indicated that they want to be a digital leader in their industry leaving 61 percent content to be a fast follower or prepared to wait until digital benefits are proven. 1 But wait and see is a risky strategy. Speed matters in the digital economy. Customers expect products and services to be instantly available through whatever channel they choose. New competitors are springing up from unrelated industries or low-cost, technology-powered digital business models. These competitors apply a different mind-set and path to seize market share and turn the value chain of an established company, or even an industry, on its head. If agility accelerates growth, innovation is the driving force to achieve it. Business innovation is digital innovation driven by new ideas and advances in technology. The Accenture Technology Vision 2015 revealed that 62 percent of business and technology executives are investing in digital technologies, and 35 percent are comprehensively investing in digital innovation as part of their overall business strategy. 2 As technology leaders, CIOs have a tremendous opportunity to be relentlessly proactive in identifying how technology can create new value for the business. CIOs and the IT organizations they lead are well connected to the technology industry with the skills and talents to make sense of an increasingly complex and ever-changing landscape. They also have the visibility across the business, from research and development to marketing, operations, sales and distribution. As such, CIOs are ideally placed to be innovation champions, identifying and exploring emerging and existing technology with the business and working together to create new business opportunities. If agility accelerates growth, innovation is the driving force to achieve it. 1 Source: Accenture Strategy Executive research Source: Accenture Technology Vision Survey, January 2015

3 3 Driving business growth through technology innovation CIOs critical role as digital innovators Leading CIOs who successfully steer technology innovation for the business have three distinct characteristics: 1. Be relentlessly innovative Innovation is not a hobby to be picked up and put down when time permits. In the same way that CIOs would build an IT capability for a service management function, the technology innovation agenda needs to be systematically established. The CIO must create a playground for exploration, enabling IT to explore new technologies and their disruptive implications, and the business to have the technology tools to explore new digital markets and product opportunities. These diverse groups must come together through an ideation, test and learn, and collaborative innovation process. Leading CIOs recognize innovation takes many different forms across the organization, and their response must vary accordingly. The innovation challenge of creating new markets and digital products, using emerging digital technologies, is very different from incremental improvements to existing products and operational processes using the next generation of today s technology solutions. A thriving technology innovation service has a strong voice on the latest business and technology trends, collating ideas and drawing disruption insights from multiple and often new sources. Influential insights today come from crowdsourced ventures and bloggers, venture capitalists and strategic research and development laboratories stretching from Silicon Valley, to Tech City London, and out to Tel Aviv, Bangalore and Beijing. Leading CIOs ask difficult, disruptive questions and challenge the viability and impact of technology-led innovation on the future of the business. Techniques such as value chain disruption analysis can prove invaluable to fuel such debates. Leading CIOs provide innovation platforms for the business and IT to explore market shifts and customer needs, iterate and refine minimal viable products, and learn by doing. Digital provides the toolkit to create exploration sand pits. Cloud technologies can spin up environments with unconstrained processing power. Crowdsourcing offers rapid prototyping options. APIs open up and provide access to information. Software virtualization simulates live services. And continuous delivery techniques combined with cross-function, geography, and external company collaboration tools help bring products to market quicker than ever before. Joint business and technology portfolio management becomes a critical innovation discipline, channeling investments and people to nurture innovation ideas as they mature, or discarding ideas and refocusing. By introducing flexible portfolio management tools, the CIO can support the business to create a balanced mix of innovation bets, and gain visibility of all change activity, from idea through to development and ultimately live services. The CIO is placed at the center of innovation, as opposed to having to reactively respond at the 11th hour as new services are thrown over the wall. The reality is that innovation is multi-dimensional.

4 4 Driving business growth through technology innovation 2. Earn the right to innovate at an enterprise level Building a distinctive technology innovation service will be off to a standing start unless the business systems are sufficiently agile to flex to the necessary changes. In a global Accenture Strategy survey among more than 1,200 business and technology leaders, 3 90 percent said that IT-led innovation is critical to their company s growth and survival. Yet, only 57 percent consider their organizations to be early adopters when it comes to new technology-driven innovation. This disconnect shows a clear need for IT to do more, and more quickly, when it comes to innovation. However, in reality, most enterprises are burdened by layers of complexity across their technology footprint from historic though well-intentioned decisions that make it difficult for CIOs to step beyond operational issues to prove their innovation credentials. As a result, most business people do not see their technology function as being innovative their perception being that IT functions move too slowly to be innovative. In fact, 61 percent of executives surveyed fail to identify their technology architecture as nimble. Innovation is difficult without the agility to put new ideas into practice. 4 In such a dynamic climate, by the time traditional IT organizations have approved resources to work on innovation ideas, the goalposts have moved, time and effort is wasted, and the business has lost valuable time. Such a cycle provides a hotbed for pseudo innovation often manifested as the creation of stand-alone customer facing or siloed product systems, complete with website and app, adding long term IT cost and complexity. The answer lies in gaining agility through systematic year-onyear investment in simplification of the IT architecture, operating model and working processes. Successful simplification has the added benefit of starting with business strategy and vision, not technology, and therefore presents the opportunity for the CIO to open up the debate about how technology innovation can support and empower the business. Simplification also brings cost savings that can form the basis of investments to trial new innovative ways of working in the safety of their own organization before wider dissemination. The growing focus on security and resilience, due to planned and unplanned disruptions such has cyber threats, is further hampering business and technology from focusing on technology-powered innovation. When asked about balancing spend-to-protect and spend-to-enable, only 38 percent of executives strongly agreed that their platforms are mature and continuously managed. 5 Most enterprises are burdened by layers of complexity across their technology footprint. 3 Source: In 2015, Accenture Strategy surveyed executives around the world on a variety of topics related to multi-speed business and IT, business resilience, technology led innovation and the digital agenda 4 Source: Accenture Strategy research on the intersection of business and technology, Source: Accenture Strategy research on the intersection of business and technology, 2015

5 5 Driving business growth through technology innovation 3. Lead by example with innovation to become a digital transformation leader By formalizing the technology innovation agenda and delivering simplification and agility across the technology footprint, the CIO demonstrates the credentials to be a digital leader. Routinely bring new technology innovation ideas as part of strategy and investment planning. Bring the discipline to join up innovation and business change across the organization to deliver end-to-end digital transformational change. Rotate business and technology talent to evolve the practices and culture of the organization to advance new digital ways of working. Put tangible incentives in place to drive different behaviors. Sixty-one percent of executives surveyed indicated they reward innovation directly while 35 percent do so indirectly. 6 Leading CIOs market their successes both within and outside of the organization. As a champion of innovation, the CIO becomes a role model for leadership to their existing IT teams, and also attracts new top talent to help them deliver further innovation led change. Ninety-one percent of executives surveyed believe that innovation is most successful when IT is integrated throughout the innovation process in today s digital world. 7 With their end-to-end view of the organization, delivery track record and technology innovation insights, CIOs can be at the center of innovation and take the final step from being known as a technology leader, to recognition as a digital innovation leader. New technology innovations must be routinely discussed as part of strategy and investment planning. 6 Source: Accenture Strategy research on the intersection of business and technology, Source: Accenture Strategy research on the intersection of business and technology, 2015

6 6 Driving business growth through technology innovation 8 San Francisco Giants The Giants are among the most innovative and tech-savvy teams in baseball. Bill Schlough, the club s CIO, says innovation is a fundamental driver of their success on and off the field helping the Giants win three World Series championships in the last 10 years. Technology enables much of this innovation: video analytics, dynamic ticket pricing, free Wi-Fi, and contactless payments are just a few examples. Technology is positioned at the heart of the club s agenda, enabling the CIO to take control of enterprise innovation, recognize and reward it. 8 Source: CIO Insight,

7 7 Driving business growth through technology innovation From implementer to innovator Under threat from the commoditization of core technology, and increased maturity of as-a-service offerings and the sourcing market, the CIO role is at risk of shrinking threatening to become little more than a manager of third-party services. CIOs can lead the digital charge if they: Develop a business and technology vision Bring the latest technology trends, insights and implications and kick start a joint business and technology innovation agenda. The process will expose weaknesses in the strategy and open up the next round of business and technology collaboration opportunities. Simplify and drive agility Trial innovative initiatives, technologies, services and working practices that can begin to address technology complexity. Address processes and prepare to operate as a multi-speed business. Formalize innovation Establish the business and technology innovation appetite, secure seed funding and establish a technology innovation service. Formalizing technology innovation and leading by example will quickly re-position and secure the long term future of the CIO at the center of the digital innovation debate.

8 Contact the Author David Quinney Additional Contributors Ash Mehta Doug Ayling Join the About Accenture Accenture is a global management consulting, technology services and outsourcing company, with more than 336,000 people serving clients in more than 120 countries. Combining unparalleled experience, comprehensive capabilities across all industries and business functions, and extensive research on the world s most successful companies, Accenture collaborates with clients to help them become high-performance businesses and governments. The company generated net revenues of US$30.0 billion for the fiscal year ended Aug. 31, Its home page is About Accenture Strategy Accenture Strategy operates at the intersection of business and technology. We bring together our capabilities in business, technology, operations and function strategy to help our clients envision and execute industry-specific strategies that support enterprise-wide transformation. Our focus on issues related to digital disruption, competitiveness, global operating models, talent and leadership helps drive both efficiencies and growth. For more information, or visit Copyright 2015 Accenture All rights reserved. Accenture, its logo, and High Performance Delivered are trademarks of Accenture. The views and opinions expressed in this document are meant to stimulate thought and discussion. As each business has unique requirements and objectives, these ideas should not be viewed as professional advice with respect to your business. This document makes descriptive reference to trademarks that may be owned by others. The use of such trademarks herein is not an assertion of ownership of such trademarks by Accenture and is not intended to represent or imply the existence of an association between Accenture and the lawful owners of such trademarks.